SC Global Developments

[propertyinvestor]

If wheelock thinks 50% discount to RNAV is cheap, why didnt they buy agressively at $1.20 2 weeks ago?

Wouldnt this mean Wing Tai, Ho Bee, Heeton and Tuan Sing are dirt cheap as well?

[greengiraffe]

Bt Article:

Stake is up as Wheelock buys SC Global shares
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Mr Cheong: Offered $1.80 per share - PHOTO: ARTHUR LEE
WHEELOCK Properties (Singapore) has upped the ante in Simon Cheong's bid to take SC Global Developments private. It announced yesterday that it had acquired 1.066 million SC Global shares from the open market at about $1.81 per share, one cent higher than Mr Cheong's offer price. The acquisition takes Wheelock's stake in SC Global to about 16.09 per cent.
Wheelock senior executive director Tan Bee Kim said in a statement: "In our assessment, the current share price represents a discount of some 40-50 per cent of RNAV (revalued net asset value), and we would be unable to buy property assets directly at anything like these prices."
The group added that it has appointed Goldman Sachs (Singapore) as its financial adviser in relation to Mr Cheong's voluntary unconditional cash offer.
However, some market watchers note that Wheelock's move to buy more SC Global shares reduces the counter's free float - and move Mr Cheong closer towards his goal of taking the company private. Once the free float falls below 10 per cent, the counter is vulnerable to delisting. In a separate announcement, SC Global said that it had appointed PrimePartners Corporate Finance as independent financial adviser to advise the company's independent directors on the offer.
Mr Cheong is making the offer through his investment holding company MYK Holdings Pte Ltd. Prior to the offer, he controlled 55.06 per cent of SC Global. As at 5pm yesterday, aggregate holdings of the offeror and parties acting in concert have risen to 60.74 per cent after he had acquired or agreed to acquire shares representing about 5.68 per cent of the company. Mr Cheong has said that delisting would allow SC Global greater flexibility to manage and plan the business. Going private would relieve SC Global of public listing costs and requirements.
Mr Cheong's offer price of $1.80 per share works out to a premium of 49.4 per cent over the last traded price (on Nov 30) prior to the announcement of the offer and a premium of 71.1 per cent over the 12-month volume weighted average price.
Both figures are the highest premiums offered for a property company in Singapore in the past five years.

ST Article:

Wheelock Properties snaps up stock in SC Global

Published on Dec 14, 2012


By Jonathan Kwok

WHEELOCK Properties yesterday bought 1.07 million shares in SC Global Developments, in a snub of SC Global chairman and chief executive Simon Cheong's bid to privatise the company.

It bought the stock at about $1.81 each from the open market, it said last night.

Its entry price is above the $1.80 that Mr Cheong tabled last week for all the stock of SC Global that he does not already own. Wheelock now holds about 16.09 per cent of SC Global shares.

"In our assessment, the current share price represents a discount of some 40 per cent to 50 per cent of RNAV (revalued net asset value), and we would be unable to buy property assets directly at anything like these prices," said Wheelock senior executive director Tan Bee Kim in a statement.

The latest action by Wheelock is a clear indication that it does not accept Mr Cheong's offer price to take the property company private, setting up a battle royale for the company.

Mr Cheong has managed to increase his stake in SC Global, taking his total stakeholding to more than 60 per cent.

He needs to get his hands on approximately 11 per cent more of the company's shares to reach the 90 per cent threshold for the privatisation to go through.

The 90 per cent threshold is significant because, according to the Singapore Exchange's listing rules, the free float of a listed company's shares cannot fall below 10 per cent.

The 16 per cent stake held by Wheelock Properties and the 3 per cent stake held by SC Global executive director David Tsang also count towards the 90 per cent.

Free float shares exclude shares held by directors, the chief executive, substantial shareholders with more than a 5 per cent stake, controlling shareholders of the issuer or its subsidiaries.

Technically, Wheelock's latest action actually helps Mr Cheong's bid as its new shares will be counted towards the 90 per cent, said market watchers.

"But it is clearly signalling to the rest of the market that it thinks Mr Cheong's offer is too low," said a source.

Mr Cheong's bid to take SC Global private values the property developer at about $745 million.

jonkwok@sph.com.sg

[money]

So many sharks this morning! what if the govt changes the rules slightly ... hmmm

[freedom]

If wheelock thinks 50% discount to RNAV is cheap, why didnt they buy agressively at $1.20 2 weeks ago?

Wouldnt this mean Wing Tai, Ho Bee, Heeton and Tuan Sing are dirt cheap as well?

There are a lot of cheap things around. Does that mean you have to buy them?

the action from wheelock is just a gesture to SC Global that don't expect to private it cheaply.

Wheelock is unlikely buying more SC Global shares from the open market as it is never Wheelock's intention to own more than they want. With Simon Cheong having more than 50%, enough is enough. more is bad.

[greengiraffe]

If wheelock thinks 50% discount to RNAV is cheap, why didnt they buy agressively at $1.20 2 weeks ago?

Wouldnt this mean Wing Tai, Ho Bee, Heeton and Tuan Sing are dirt cheap as well?

There are a lot of cheap things around. Does that mean you have to buy them?

the action from wheelock is just a gesture to SC Global that don't expect to private it cheaply.

Wheelock is unlikely buying more SC Global shares from the open market as it is never Wheelock's intention to own more than they want. With Simon Cheong having more than 50%, enough is enough. more is bad.

Hi Freedom,

I certainly agree with your thoughts. Wheelock is a wrong term investor in SC Global irregardless of its listing status or whether SC Global will end up paying taxes on unsold completed properties.

Its a powerful signal to Simon that he needs to pay up in order to achieve his own objectives. Both Simon and Wheelock knows the real value of the completed properties and both have their means to hold on to them until they realise the value.

Of course, Simon as the majority holder is focussing on minimising the holding costs (not paying the taxes) via the voluntary offer and only a successful "Singaporisation" of the company will meet his objectives.

If I am not wrong, Wheelock first bought the $3 stake in SC Global via a purchase from Simon himself. Even though the man who executed the strategy has passed away, Mr Lawrence has nevertheless apologised to shareholders for his hedging strategy and all his actions were penned down as well.

Hence for a Buffet style type of shareholder in Wheelock, it is likely that only recovering their historical costs and perhaps some holding costs in SC Global shares for Wheelock can amicably resolve the standoff.

Interestingly, Wheelock has gentlemanly allow Simon a little window to accumulate an extra 5% of SC Global before moving in yesterday.
Its definitely worth watching this casino royale unfold. Akan Datang.

[cfa]

Wheelock was as good as telling SC that they would not accept offer price if 1.80.

[greengiraffe]

BT Article:

PUBLISHED DECEMBER 15, 2012
Stake news lifts shares of SC Global, Wheelock
Analyst estimates of SC Global's revalued net asset value vary widely
BYMINDY TAN PRINT |EMAIL THIS ARTICLE

MR CHEONG
Wheelock's purchase price of about $1.81 a share is a shade higher than the $1.80 that he is offering to take SC Global private - PHOTO: SIMON CHEONG
SC Global Developments' shares rose 8.5 per cent yesterday on news that Wheelock Properties had raised its stake in the Simon Cheong-controlled company through the purchase of 1.067 million shares.
The stock shot to an intra-day high of $2.06 before closing at $1.975, up 15.5 cents on the day. Shares in Wheelock, whose stake in SC Global inched up to about 16.09 per cent following the open-market acquisition of additional shares, closed 6.5 cents, or 3.3 per cent, higher at $2.04.
Wheelock's purchase price of about $1.81 a share is a shade higher than the $1.80 that Mr Cheong is offering to take SC Global private.
"We believe that Wheelock is raising its stake in SC Global for a higher offer as the current offer price is still below their initial investment cost," UOB-Kay Hian said in a report yesterday.
Wheelock said late on Thursday that "in our assessment, the current share price represents a discount of some 40-50 per cent of RNAV (revalued net asset value), and we would be unable to buy property assets directly at anything like these prices". SC Global ended trading at $1.82 on Thursday.
Wheelock Properties, formerly known as Marco Polo Developments, is a subsidiary of Wheelock and Company Ltd, a major Hong Kong group.
In a statement yesterday advising shareholders to exercise caution when dealing in shares of the company, SC Global said that "statements by various stakeholders on their assessment of the offer . . . are likely to be personal to the writers or persons who had expressed them, and might not have taken into account the individual circumstances and needs of the readers".
"Shareholders are advised to treat with caution any figures or other data provided by third parties who are not in possession of property-specific details pertaining to each of the assets and liabilities of the company," it said.
Analyst estimates of SC Global's RNAV vary widely. AM Fraser values it at $1.98 a share, DMG and Partners Security at $3.65, and Maybank Kim Eng at about $4.00.
SC Global has appointed PrimePartners Corporate Finance as independent financial adviser to the company's independent directors on the offer.
An analyst, who declined to be named, said: "There's a lot of upside in the RNAV. Obviously, you can't expect them to get 100 per cent of the RNAV payout. Allgreen's the most recent and relevant, (and was taken private) at about 19 per cent discount, which would suggest that a pricing of mid- to high-$2 as fair value here. Given that Simon Cheong has a majority stake, you probably can't get that, but we still think (a fair offer price) should be above $2."
He added: "Mr Cheong has a strong incentive to strike a deal with the remaining shareholders who are holding out for a higher price (since) if he can get support of the bigger shareholders, he can go private and eliminate the penalties."
Some market watchers have speculated that SC Global's bid to take the property development company private could stem from the fact that if the company is fully owned by Singapore citizens, its residential projects may no longer be under Qualifying Certificate (QC) conditions, subject to government approval.
"There is a difference between a 'developer going private' and the definition of a 'Singapore company' under the Residential Property Act (RPA)," said a spokesman from the Ministry of Law. "In general, if a foreign company becomes a Singapore company as defined under the RPA, it can apply to the Singapore Land Authority (SLA) for a Clearance Certificate to purchase residential properties henceforth.
"SLA will determine if the applicant company meets the requirements for a Singapore company under the RPA. If an application is made, SLA will also determine if the Qualifying Certificate(s) issued for the purchase of residential land when the applicant was a foreign company would be cancelled," said the ministry.
Phillip Securities analyst Bryan Go suggested that existing shareholders adopt a wait-and-see approach.
"There is a potential that Simon Cheong could raise his offer price because the market price is already higher and he can't do market purchase," said Mr Go.
Said Sarah Wong, research analyst at AM Fraser: "I reckon the best-case scenario for Simon Cheong is to have SC Global delisted with a free float below 10 per cent first, before buying out other foreign shareholders' stakes. If delisting doesn't come to pass, it follows naturally then that he'd most likely have to increase his offer."
Even as Wheelock signals to the market that it thinks Mr Cheong's offer is too low, some think Wheelock's latest action helps Mr Cheong's bid to take the company private. This is because the counter is vulnerable to delisting once the free float falls below 10 per cent.
Mr Cheong's total control in SC Global stands at over 60 per cent. Including the stakes held by Wheelock and executive director David Tsang, Mr Cheong needs to get his hands on approximately 11 per cent more of the company's shares to reach the 90 per cent threshold.
Said a market watcher: "The worst-case scenario for retail investors is that SC Global stays listed, but liquidity gets shrunk. At some point, this counter is destined to be delisted. . . What's propping his price up now is the privatisation offer, so even if the offer fails, he can continue to nibble up shares until he hits the 90 per cent mark."
.Additional reporting by Felda Chay

ST Article:

SC GLOBAL PRIVATISATION
Wheelock swoop hits tycoon's plan

Purchase of over 1m shares sends stock soaring above his buyout offer

Published on Dec 15, 2012


By Magdalen Ng

THE move by Wheelock Properties to buy more than one million SC Global shares on the open market on Thursday has hit plans by property tycoon Simon Cheong to privatise the firm.

The share swoop took Wheelock's holding to 16.09 per cent and sent SC Global stock soaring 15.5 cents, or 8.52 per cent, to $1.975 yesterday.

That is well above Mr Cheong's buyout offer of $1.80 per share.

Listing rules prevent Mr Cheong from buying shares on the open market above his offer price - so he either has to hold fire or raise that buyout offer.

Mr Cheong, chairman and chief executive of SC Global, launched a $745million cash offer for all the remaining ordinary shares of the luxury property developer last week.

He has since increased his stake to more than 60per cent.

About 22per cent of SC Global shares are still in the public float, but if this falls below 10per cent, the stock may be suspended under Singapore Exchange (SGX) rules.

By the same token, a firm cannot be delisted if the public float is above 10 per cent.

Wheelock's 16.09 per cent stake is not considered in the public float because the firm is deemed a substantial shareholder, as its holding exceeds 5 per cent.

Wheelock's share-buying seems to be indicating that the offer of $1.80 is too low.

In its announcement of its acquisition on Thursday, it noted that SC Global's share price "represents a discount of some 40 to 50 per cent of (SC Global's) revalued net asset value".

It also said: "We would be unable to buy property assets directly at anything like these prices."

An analyst who declined to be named told The Straits Times: "Wheelock probably recognises the value in SC Global's land bank.

"Wheelock has not been making many physical investments in recent years, so this stake in SCGlobal will give it exposure to Singapore's high-end residential market."

Technically, the more shares Wheelock buys on the open market, the fewer remain in the public float, which helps Mr Cheong's privatisation bid.

But if Wheelock's 16.09 per cent stake could be deemed as being part of the public float, then Mr Cheong's buyout could be stymied because a firm cannot be delisted if its public float is above 10 per cent.

Market watchers say the logical next step for Wheelock Properties may be to ask the SGX to consider its holding as part of the public float.

Rodyk & Davidson partner Ng Eng Leng noted that he has yet to hear of such a waiver being granted or even applied for.

But if Wheelock manages to achieve this, its 16.09 per cent stake will effectively prevent SCGlobal's delisting because the shares in the public float will always be more than 10 per cent.

The SGX was unable to reply by press time.

SC Global yesterday cautioned shareholders about the assessments and opinions about the buyout in the media.

"The board notes that many of (these) views are likely to be personal to the writer... and might not have taken into account the individual circumstances and needs of the readers," it said.

"Shareholders are advised to treat with caution any figures or other data provided by third parties who are not in possession of property specific details pertaining to... the company."

songyuan@sph.com.sg

[Caelitus]

I divested at $2.08. I shall see if I am wrong to do so when the Offeree Circular comes out (no later than 2 Jan 12).

Anyone holding out for a bidding war?

[freedom]

Where got bidding war?

Wheelock will never bid against Simon Cheong. With Simon Cheong having more than 50%, any other bid is suicidal.

[Caelitus]

Where got bidding war?

Wheelock will never bid against Simon Cheong. With Simon Cheong having more than 50%, any other bid is suicidal.

Apologies. What I meant was would SC Global raise its offer price to buy out Wheelock's stake if SC wants to be the sole owner.